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SVOD In Line For Steep Growth, But Is Netflix Under Threat?

Juniper Research forecasts steep subscription video-on-demand (SVOD) growth over the next five years, however it may not all be smooth sailing for SVOD giant Netflix.

New Juniper data finds that SVOD revenues from services such as Netflix and Amazon are set to more than double from US$14.6 billion this year to US$34.6 billion in 2021.

According to Juniper, “SVOD providers can expect to see substantial returns on their expansion and growth strategies, as more countries and markets move to this method of video consumption, in a continual move away from linear, scheduled TV”.

However, Netflix, which in its most recent quarter saw year-on-year US and international subscriber additions slow, may not have things all its own way.

While Netflix has seen rapid expansion this year, having launched in 130 new countries in January, Juniper notes that “international subscriber growth lacks pace”.

Juniper notes that Netflix’s expansion has resulted in price increases, with the beneficiaries to potentially be its rivals “if the competitor price differential becomes too great”.

“Whilst Netflix has expanded its coverage globally, the test will be whether it can meet its original content production costs, as well as provide quality content to consumers,” research author Lauren Foye commented.

“It is believed that US rival Hulu is now close to offering the same amount of content as Netflix, and others are pushing new models, such as Amazon’s monthly subscriptions to Prime video, and YouTube Red subscriptions for exclusive content.”

Among Juniper’s other findings, total TV and video data usage will grow more than fivefold from 2016 to 2021, with the uptake of 4K increasing download sizes, while combined 4K SVOD and transactional video-on-demand (TVOD) revenues are set to grow to account for 13 per cent of total over-the-top revenues by 2021.

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